Transcript

Transcript of a Press Briefing by Thomas C. Dawson, Director, External Relations Department, IMF

November 16, 2005

MR. DAWSON: All right. Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular briefings. As usual, the briefing is embargoed until 10 or 15 minutes after conclusion, and I will set the precise time at that point.

I'd like to flag a few items before taking questions, including from our viewers on the Media Briefing Center.

The Managing Director will travel to Frankfurt, Germany, on November 18th, to participate in the European Banking Congress; then to Algiers on November 21-22, to participate in a conference on trade facilitation in Algeria, Morocco, and Tunisia, organized by the IMF and hosted by the Algerian authorities; after that, he proceeds to Seville, Spain, on November 22nd, to deliver a speech at Institute de San Telmo.

First Deputy Managing Director Anne Krueger will travel to Innsbruck, Austria, tomorrow, November 17th, to deliver the Bohm-Bawerk Lecture at the University of Innsbruck. The title of the lecture is "From Despair to Hope: The Challenge of Promoting Poverty Reduction in Developing Countries." I believe we have plans to post the text of the lecture as well.

I would note the Fund will be on official holiday November 24th and 25th; however, Media Relations will have its usual duty officer rotation in place for any inquiries from the press.

Looking ahead, I anticipate that sometime after the holiday, we will have a briefing, a press briefing on the state of the multilateral debt relief initiative. I know this is an issue that is of wide interest both to you in the press as well as to the public more generally. There has been significant progress on the initiative and implementing it in recent weeks, and we will have more for you shortly. As you know, the debt initiative was endorsed during the Annual Meetings by the IMFC, and the Board of Governors also, on a separate subject, has endorsed the Managing Director's plan for a review of the Fund's medium-term strategy, and we expect to have also more on the strategic review later in this year, calendar year.

So I think that is what I have to start with, and I will be happy to take any questions that you all may have.

QUESTIONER: [On the multilateral debt relief initiative.]

MR. DAWSON: Oh, yes. Thank you for observing proper etiquette in identifying yourself and making your mothers proud of you, or fathers, as you may wish.

QUESTIONER: [inaudible, off microphone.]

MR. DAWSON: We will--the initiative, which, of course, started as a proposal coming out of the G-8, had the list of HIPC countries that it was involved. There is discussion in the--and I should note it involves largely three institutions: the Fund, the World Bank, and the African Development Bank. So I can only answer that particular question, but other questions as well, only with regard to the Fund itself.

Yes, there is the possibility of an additional country or two being added to the initiative, and that's one of the issues being discussed in the--in our discussion, and that will be one of the issues we'll be able to discuss with you when it gets out. Good question.

QUESTIONER: I just wanted to know, Tom, there was a meeting--an informal meeting of the Board on July--I think it was the 8th or the 7th--where a paper--the staff presented a paper on the Argentinean position--situation and what should be done. This paper was mentioned by Lavagna in a speech recently, and I was wondering if this is the paper which was going to be the framework or the--the frame or the basis for the negotiations from now on?

MR. DAWSON: No, I think the--I don't think it's productive to talk about any particular paper, document, or whatever, in terms of the framework. You know, Argentina is a member in full standing of the Fund. We have normal relations with the Fund--with Argentina. The Fund has normal relations with Argentina. And the context in which discussions will take place is, as I have said on a number of occasions, fundamentally a question for the Argentinean authorities to indicate that they wish to start such discussions.

To repeat--in fact, I am repeating what we've said in previous meetings, the last several press briefings--there have been no specific developments since my last press conference. But as I have already just said, as with any Fund member, we have normal relations with Argentina, and we will be happy to react to any proposals from them. So that's essentially what the state of play is now.

QUESTIONER: [inaudible].

MR. DAWSON: Sure.

QUESTIONER: [inaudible] there is the impression that the government is waiting for a signal of some kind of flexibility or some kind of understanding of their position. As I understand, there is some differences and [inaudible] reaction?

MR. DAWSON: I understand your question, but I just have to go back to what I said before. I think the state of play is for the authorities to indicate, you know--to give a bit of history, you will recall the authorities indicated they wished to wait to continue with the agreement in the context, among other things, of the run-up to the elections. And we've indicated that's appropriate, that as with any country relationship, it is up to the authorities to indicate when they wish to resume discussions with the Fund, and that's the state--the state that we are. And as I indicated, we'll be happy to react to any proposals.

QUESTIONER: [inaudible].

MR. DAWSON: On Brazil?

QUESTIONER: No. [inaudible].

MR. DAWSON: One last try, okay.

QUESTIONER: As you know, there is word also that if there is no agreement, Argentina eventually is thinking the possibility of getting out of the Fund. I wanted to know how is the procedure exactly, and what is your reaction?

MR. DAWSON: That is clearly a hypothetical question. To the extent there's any reality to it, you need to ask the Argentines themselves. In terms of any timing modality issues, I'd suggest you get in touch with one of the press officers who could give you the history.

The only news I have--and it's really not even news--about anybody getting out of the Fund is myself in approximately 11 weeks.

[Laughter.]

MR. DAWSON: Okay. I anticipate--

QUESTIONER: I also think Argentina--

MR. DAWSON: I anticipated this would be a relatively slow news time. We'll have another briefing in a couple of weeks, and as I indicated, we do expect we'll have a particular briefing on the multilateral debt relief initiative. We will also probably have other briefings, I suspect one on the strategic review later on, as well as other press availability. So we'll try to liven things up for you a little bit.

QUESTIONER: You had mentioned that we'll have some briefing in the next couple weeks about the debt proposal. When the meetings ended, a lot of us were under the impression that you were going to be dotting the i's and crossing the t's and there wasn't a whole lot more to be done to implement it. Would you be able to walk us through any of--

MR. DAWSON: Well, I--

QUESTIONER: --[inaudible] discussed here?

MR. DAWSON: The Fund is a polysyllabic institution, and so dotting i's and crossing t's may take a little longer than in some other organizations. But it is--clearly, this is an issue of implementation. These are not, you know, questions of whether we will go forward. I would note--and there's been a--a timetable was proposed. A timetable was--in the spring by the G-8. A timetable was endorsed in the fall meetings by the membership as a whole, and we fully expect to meet that timetable of concluding this by the end of this calendar year, 2006. I will not misidentify what year we are in this time.

QUESTIONER: Thank you. I wanted to ask you about Iraq. Apparently, I was not prepared either for this to be so slow in terms of news, so my question--

MR. DAWSON: You should have just asked me.

QUESTIONER: My question--my question is kind of not really specific. What's happening with the Fund work in Iraq, both the physical presence there and the money given to the country?

And, also, I guess the U.S., which is the lead country in the coalition there, is talking more and more about the misappropriation of funds in Iraq, the waste of funds in Iraq, stuff like that. Do you have any concerns, similar concerns with your own money?

MR. DAWSON: I mean, certainly the Fund has an established safeguards policy and in terms of our--the use of Fund money as it is lent to a country is something that we do take quite seriously, and we have established procedures in that regard.

With regard to that issue a little more generally, there is, of course, the IAMB, the International Advisory and Monitoring Board. And I would direct you to what they have been reporting in that regard. The Fund, of course, participates in that board.

With regard to physical presence in the country, we do not have a physical presence, but, of course, we do not go into detail in terms of what our own travel and other issues are as far as security. But we remain in close contact with the Iraqi authorities in a variety of venues and modes.

In terms of the state of play, obviously, you know, in Iraq we have the parliamentary elections coming up on December the 15th. The government, you know, has been making progress on bilateral agreements on debt cancellation. And in terms of the Fund program, as we indicated a week or two ago, the staff has made very good progress on a program working with the Iraqi authorities. That could be supported by a stand-by arrangement for Iraq, and when we have something to announce in terms of a possible Board date, we will. This is something that I think you should keep alert to as coming on.

You will recall our original plan has been-- when we can fulfill our plans -- to have -- to see if we could have a stand-by arrangement by the end of this calendar year, and that remains our goal, and I have no reason to believe that it will not happen.

Okay. Well, then, we will lift the embargo then at, say, 10:30, and we will try to develop--yes?

[Inaudible comment.]

MR. DAWSON: I'm sorry. We do have one more question coming [via the Media Briefing Center], which I'll get to in a minute, but we'll--it will be a short answer, so I will do the briefing--we will lift the embargo at 25 minutes to 11:00.

[Quoting the question submitted via the Internet site]: On the Fund--on China, the Fund advocates a system of more flexibility. What order of magnitude of flexibility would the Fund think appropriate? The U.S. Congress would like to see 27.5 percent, but Rajan--I believe she's referring to Raghu Rajan, our Economic Counselor and Director of Research -- said such a big step would be harmful to China and other Asian nations.

I don't think it's appropriate for me to be talking about orders of magnitude. But certainly we do believe that the Chinese authorities were correct in moving to a more flexible exchange rate system and that we do believe, continue to believe that they should take full advantage of that flexibility. And I think I will leave it at that point.

This is, of course, another one of the issues that will be of interest to everyone in the coming weeks and months.

Thank you very much.